US Dollar Gains Despite Softer PCE Report: Forex Market Recap

The US dollar gained ground on Friday, even as the July Personal Consumption Expenditures (PCE) price index came in slightly below expectations. The market was also influenced by a planned gradual production increase by OPEC+ from October and strong Canadian GDP figures. However, the Canadian dollar ultimately weakened as the details of the GDP report revealed no growth in June and July, with the majority of the quarter’s growth attributed to government spending. The euro closed above 1.10, but its gains were limited after a week of declines following a three-week surge. The Australian dollar weakened alongside a drop in oil prices, while the Japanese yen lagged behind the broader US dollar strength. Overall, the US dollar’s strength at the end of August sets the stage for a potentially volatile September.